Kansas City Southern Notice of 2015 Annual Meeting of Stockholders and Proxy Statement May 7, 2015 YOUR VOTE IS IMPORTANT Please submit your proxy or voting instructions by internet, telephone or mail. We commenced mailing this Notice and Proxy Statement, the enclosed proxy card and the accompanying 2014 Annual Report on or about April 6, 2015. KANSAS CITY SOUTHERN Notice of Annual Meeting of Stockholders Thursday, May 7, 2015 Kansas City Southern Record Date 3:00 p.m. Central Time Grand Hall The close of business 427 W. 12th Street March 9, 2015 Kansas City, Missouri 64105 Items of business: 1. Election of two directors; 2. Ratification of the Audit Committee’s selection of KPMG LLP as our independent registered public accounting firm for 2015; 3. An advisory vote to approve the 2014 compensation of our named executive officers; 4. A stockholder proposal, if presented at the Annual Meeting, to reduce the ownership percentage needed to call special stockholder meeting; and 5. Such other matters as may properly come before the Annual Meeting or any adjournment thereof. Only stockholders of record at the close of business on March 9, 2015 are entitled to notice of and to vote at the Annual Meeting or any adjournment thereof. By Order of the Board of Directors, Adam J. Godderz Associate General Counsel & Corporate Secretary The date of this Notice is April 6, 2015. Please date, sign and promptly return the enclosed proxy card, regardless of the number of shares you may own and whether or not you plan to attend the meeting in person. Alternatively, you may cast your votes by telephone or through the Internet as described on the proxy card. You may revoke your proxy and vote your shares in person in accordance with the procedures described in this Notice and Proxy Statement. Please also indicate on your proxy card whether you plan to attend the Annual Meeting. 2015 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT KANSAS CITY SOUTHERN Table of Contents Proxy Statement Summary 1 Questions and Answers about Voting and Annual Meeting 2 Proposals for 2015 Annual Meeting 6 Proposal 1: Election of Directors 6 Proposal 2: Ratification of Independent Registered Public Accounting Firm 8 Proposal 3: Advisory Vote to Approve Executive Compensation 8 Proposal 4: A Stockholder Proposal to Reduce Ownership Percentage Needed to Call Special 9 Stockholder Meeting Company Information 12 The Board of Directors 12 Board Committees 15 Corporate Governance 18 Beneficial Ownership 22 Compensation Discussion and Analysis 25 Compensation Committee Report 38 Executive Compensation 39 Summary Compensation Table 39 Grants of Plan-Based Awards 42 Outstanding Equity Awards at Fiscal Year-End 44 Option Exercises and Stock Vested 47 Potential Payments Upon Termination of Employment or Change in Control 48 Director Compensation 61 Certain Transactions 64 Section 16(a) Beneficial Ownership Reporting Compliance 64 Report of Audit Committee 65 Independent Registered Public Accounting Firm 66 Stockholder Proposals for 2016 Annual Meeting 67 2015 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT KANSAS CITY SOUTHERN Proxy Statement Summary This summary highlights information contained in this Proxy Statement. Please read the entire Proxy Statement before voting. 2015 Annual Meeting of Stockholders Thursday, May 7, 2015 Kansas City Southern Record Date 3:00 p.m. Central Time Grand Hall The close of business 427 W. 12th Street March 9, 2015 Kansas City, Missouri 64105 Agenda and Voting Recommendations Page Reference for More Proposal Board Recommendation Information 1. Election of the following nominees for a one-year term: FOR each nominee 6 Lu M. Córdova Thomas A. McDonnell 2. Ratification of the Audit Committee’s selection of KPMG LLP FOR 8 as our independent registered public accounting firm for 2015 3. Advisory vote to approve the 2014 compensation of our named FOR 8 executive officers 4. Stockholder proposal to reduce ownership percentage needed AGAINST 9 to call special stockholder meeting Board of Directors Committee Name Term Ending Director Since Independent Memberships Lu M. Córdova* 2015 2010 ✓ A,F,N Thomas A. McDonnell* 2015 2003 ✓ A,F,N Michael R. Haverty** 2015 1995 Terrence P. Dunn 2016 2007 ✓ A,N Antonio O. Garza, Jr. 2016 2010 ✓ E,F David L. Starling 2016 2010 E Henry R. Davis 2017 2008 ✓ C,N Robert J. Druten, Chairman 2017 2004 ✓ C,E,N Rodney E. Slater 2017 2001 ✓ C,N * Nominee for election to Board of Directors at 2015 Annual Meeting **Mr. Haverty is not eligible to stand for re-election at the Annual Meeting. A-Audit C-Compensation & Organization E-Executive F-Finance N-Nominating & Corporate Governance 2015 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 1 KANSAS CITY SOUTHERN Questions and Answers about Voting and Annual Meeting Q: Why were you sent this Proxy Statement? A: On or about April 6, 2015, we began mailing this Proxy Statement to our stockholders of record on March 9, 2015 (the “Record Date”) in connection with our Board of Directors’ solicitation of proxies for use at the 2015 Annual Meeting of Stockholders and any adjournment thereof (the “Annual Meeting”). We will hold the Annual Meeting at Kansas City Southern, Grand Hall, 427 W. 12th Street, Kansas City, Missouri on Thursday, May 7, 2015 at 3:00 p.m. Central Time. The Notice of Annual Meeting of Stockholders, our 2014 Annual Report to Stockholders (the “Annual Report”), and a proxy card and voting instructions accompany this Proxy Statement. Unless otherwise indicated or the context requires, references in this Proxy Statement to “KCS” or the “Company” include Kansas City Southern and its consolidated subsidiaries. We will pay for the Annual Meeting, including the cost of mailing the proxy materials and any supplemental materials. Directors, officers and employees of KCS may, either in person, by telephone or otherwise, solicit proxy cards. They have not been specifically engaged for that purpose, however, nor will they be compensated for their efforts. We have engaged Morrow & Co., LLC, 470 West Avenue, Stamford, Connecticut 06902, to assist in the solicitation of proxies and provide related informational support, for a service fee and the reimbursement of customary disbursements that are not expected to exceed $25,000 in the aggregate. We will pay these fees and expenses. In addition, we may reimburse brokerage firms and other persons representing beneficial owners of our shares for their expenses in forwarding this Proxy Statement, the Annual Report and other soliciting materials to the beneficial owners. Brokers, dealers, banks, voting trustees, other custodians and their nominees are asked to forward this Notice and Proxy Statement, the proxy card and the Annual Report to the beneficial owners of our stock held of record by them. Upon request, we will reimburse them for their reasonable expenses in mailing these materials to beneficial owners of our stock. Q: Who may attend the Annual Meeting? A: Only KCS stockholders or their proxies and guests of KCS may attend the Annual Meeting. Any stockholder or stockholder’s representative who, because of a disability, may need special assistance or accommodation to allow him or her to participate in the Annual Meeting may request reasonable assistance or accommodation from us by contacting the office of the Corporate Secretary at our principal executive offices, (888) 800-3690. If written requests are made to the Corporate Secretary of KCS, they should be mailed to P.O. Box 219335, Kansas City, Missouri 64121-9335 (or by express delivery to 427 West 12th Street, Kansas City, Missouri 64105). To provide us sufficient time to arrange for reasonable assistance, please submit all requests by April 28, 2015. Q: Who may vote at the Annual Meeting? A: Only the holders of record of our common stock, par value $0.01 per share (the “Common Stock”), and our 4% Noncumulative Preferred Stock, par value $25.00 per share (the “4% Preferred Stock”), at the close of business on the Record Date are entitled to notice of and to vote at the Annual Meeting. On the Record Date, we had outstanding 242,170 shares of 4% Preferred Stock (excluding 407,566 shares held in treasury) and 110,544,998 shares of Common Stock (excluding 12,807,187 shares held in treasury) for a total of 110,787,168 shares eligible to vote at the Annual Meeting. 2015 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2 KANSAS CITY SOUTHERN Q: How many votes does each Voting Share have? A: The Common Stock and the 4% Preferred Stock (collectively, the “Voting Stock”) constitute our only voting securities and will vote together as a single class on all matters to be considered at the Annual Meeting. Each holder of Voting Stock is entitled to cast one vote for each share of Voting Stock held on the Record Date on each matter. Q: How can you vote by proxy and what vote is necessary? A: Registered stockholders can vote by proxy in three ways, each of which is valid under Delaware law: • By Internet: Access our Internet voting site at www.envisionreports.com/ksu or by scanning the QR code on the proxy card with your smartphone and follow the instructions on the screen, prior to 1:00 a.m., Eastern Time, on May 7, 2015 (May 4, 2015 for participants in certain employee benefit plans discussed below). • By Telephone: Using a touch-tone telephone, call toll-free at 1-800-652-VOTE (8683) and follow the voice instructions, prior to 1:00 a.m., Eastern Time, on May 7, 2015 (May 4, 2015 for participants in certain employee benefit plans discussed below). • By Mail: Mark, sign, date and return the enclosed proxy or instruction card so it is received before the Annual Meeting (May 4, 2015 for participants in certain employee benefit plans discussed below).